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The Turkish economy's mysterious rebound

The Turkish economy's surprise 5% growth rate in the first quarter has stirred controversy, fueled mostly by a new calculation method adopted last year.
A general view shows the audience before a speech of Turkish Economy Minister Nihat Zeybekci in Cologne, Germany, March 5, 2017. REUTERS/Wolfgang Rattay - RTS11JXA

Last year, Turkey adopted a new method for calculating gross domestic product, the key indicator of national economies. The retroactive revision made Turkey the fastest growing country after China in the past six years, "readjusting" GDP upward by 20%. Controversy over the credibility of the new method flared up again last week as Ankara posted a 5% growth rate for the first quarter, well above forecasts ranging between 2% and 3%. Those who look at the other side of the shiny coin draw attention to a number of flaws, marked by incoherence and economic fragility.

Whether growth was really 5% and whether this rate is sustainable is open to discussion, but it is a fact that the economy has gained a certain growth momentum. The boost came partially from external dynamics and partially from domestic ones.

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